When the Brazilian subsidiary of Spanish banking giant Santander lists on the New York Stock Exchange on Wednesday, the approximately $7.2 billion initial public offering will be the largest IPO of the year.

In addition to being a milestone in terms of scale, the Banco Santander Brasil SA deal—which is scheduled to be priced on Tuesday and floated in Brazil on Thursday—also signifies that a drought in IPO issuance which hurt the market in the first half of the year is now over. There have been 29 deals so far in 2009, compared with a total of 42 IPOs for the entire year in 2008. There were seven IPOs last week, the largest weekly number in two years.

“The cause for so many IPOs is the strength of the stock markets,” says Scott Sweet, senior managing partner at Tampa-based research firm IPO Boutique. “So far this year a very low number of IPOs has debuted in the market, but the pipeline is quite full, and, with few exceptions, the quality of the IPOs is going up.”

From a global perspective, Dan Cummings, head of equity capital markets for Bank of America Merrill Lynch, says international holding companies are increasingly focusing on spinning off subsidiaries that could trade at a higher multiple than their main business.

“A lot of people are crystallizing value in local markets and trying to have local investors own local stocks and not rely upon global investors to do a sum of the parts analysis to come up with an overall valuation,” Cummings says.

Another turning point for the IPO market has been the return of private equity firms seeking to sell to the market companies that were purchased in the boom years but they were unable to sell because the market became frozen.

This week alone, two companies owned by private equity firms, Talecris Biotherapeutics Holdings Corp. and Education Management Corp., successfully debuted on the market. Talecris, a maker of protein therapies derived from blood plasma, was taken private in 2007 by Cerberus Capital Management and Ampersand Ventures, while Education Management, which operates for-profit colleges, was taken private in 2006 by a consortium of private equity firms. Both IPOs were oversubscribed.